Prudential demerger to M&G plc in October 2019

GoldfishMcGill

I've been looking through old paperwork and found some regarding some shares I hold.

I was an employee of Prudential many years ago and accrued 260 shares as part of my share option scheme.  on 21 October 2019 the Pru executed a demerger and I was given M&G Plc shares.  The same number, 260.

The share price for Pru on that date was 1345.04p and the share price of M&G plc on that date was 219.26p
Obviously I should have taken more notice of the whole demerger at the time, but sitting here now I cannot really fathom how I had shares worth around £3500 and then they were worth £570.
I know share investments can go up and down, but this seems crackers! 
Is this how demergers work? If it is then I am happy to accept that I've just lost out and I'll be wiser from the experience.  But I just find it weird. Am I naive?  I'm definitely a bit peeved...

Hoenir

What happened to your remaining share holding in the Pru?  In a demerger situation you end up with two shareholdings not one. The demerger was on the basis of one M&G Share for each Prudential Share held. 

DullGreyGuy

GoldfishMcGill said:

I've been looking through old paperwork and found some regarding some shares I hold.

I was an employee of Prudential many years ago and accrued 260 shares as part of my share option scheme.  on 21 October 2019 the Pru executed a demerger and I was given M&G Plc shares.  The same number, 260.

The share price for Pru on that date was 1345.04p and the share price of M&G plc on that date was 219.26p
Obviously I should have taken more notice of the whole demerger at the time, but sitting here now I cannot really fathom how I had shares worth around £3500 and then they were worth £570.
I know share investments can go up and down, but this seems crackers! 
Is this how demergers work? If it is then I am happy to accept that I've just lost out and I'll be wiser from the experience.  But I just find it weird. Am I naive?  I'm definitely a bit peeved...

Were you actually holding the shares at that time or still in the saving scheme?  Assuming it had matured before then then you will have retained the same shares in both companies, so your 260 Pru PLC would have been joined with 260 M&GPrudential shares, as the company was originally called. They subsequently renamed and rebranded to just M&G

As they were very different companies... Pru PLC focusing on emerging markets in Asia and Africa, so in principle high risk and potential high returns whereas M&GPrudential was investments and Pru in the UK and Europe so a reliable moderate profit type stable investment. As a consequence most will have sold one set or the other, it was the very reason for the demerger. 

If you were still saving into the scheme at the time you'll need to dig out the old records, online I can only find what happened in their second demerger when they spun off their US operations (which were never branded prudent there because another business owns the rights to "prudential" there)

EthicsGradient

I held these at the time, on a platform (I've since sold both), and this was the document detailing the split: Demerger of M&G plc base cost apportionment for UK shareholders
That says "the (closing) market value of the shares on the first day of dealing in M&G plc shares on the LSE, being £13.66 on 21 October 2019 in respect of the P Shares and £2.18 on 21 October 2019 in respect of the M Shares"
which is more or less the prices you gave - so you should have had about £3,500 in new Prudential shares and £570 of M&G shares. So you just need to track down where/how both of them are now held - if you're sure you never sold either.

wmb194

GoldfishMcGill said:

I've been looking through old paperwork and found some regarding some shares I hold.

I was an employee of Prudential many years ago and accrued 260 shares as part of my share option scheme.  on 21 October 2019 the Pru executed a demerger and I was given M&G Plc shares.  The same number, 260.

The share price for Pru on that date was 1345.04p and the share price of M&G plc on that date was 219.26p
Obviously I should have taken more notice of the whole demerger at the time, but sitting here now I cannot really fathom how I had shares worth around £3500 and then they were worth £570.
I know share investments can go up and down, but this seems crackers! 
Is this how demergers work? If it is then I am happy to accept that I've just lost out and I'll be wiser from the experience.  But I just find it weird. Am I naive?  I'm definitely a bit peeved...

Note that in recent years Prudential's share price has been crushed, see below, the high in early 2018 was 1992p. M&G trades at c.202p today. You should also have been receiving dividends from Prudential and M&G along the way. 260 shares in each should together be worth more that £570, though. 

In addition, a couple of years ago you should have received some Jackson Financial Inc. (NYSE:JXN) shares or cash when that demerged from Prudential.

GoldfishMcGill

Thanks for the replies.  I feel reassured that I maybe do hold the Pru shares still.  I'm going to look into it further.  I felt sick at the thought of losing £3000 but it seems that that is not the case.  Thank you 

eskbanker

GoldfishMcGill said:

Thanks for the replies.  I feel reassured that I maybe do hold the Pru shares still.  I'm going to look into it further.  I felt sick at the thought of losing £3000 but it seems that that is not the case.  Thank you 

It looks like there may still have been considerable value loss by virtue of the share price halving since that demerger, so if the thought of that makes you feel sick then you should seriously consider investing in something more suited to your risk tolerance than an individual company, such as diversifying into collective products....